The role of the interprovincial transfers in the β‐convergence process

Abstract

PurposeBased on the approach of Timljonavich and Vogelsang, the purpose of this paper is to present empirical evidence of the role of the federal transfers on the β‐convergence process in Canadian provinces.Design/methodology/approachThe paper uses information on annual personal income for the period 1926‐1999 to present empirical evidence about the notion of β‐convergence for the ten Canadian provinces.FindingsThe principal conclusion is that the inter‐provincial transfers were not determinant or decisive to the attainment of deterministic convergence in the Canadian provinces.Originality/valueWhile the issue of convergence has been analyzed especially using cross‐sectional data or panel data, this paper uses a time‐series methodology with statistics recently proposed by Vogelsang and Bunzel, which are robust to the presence of I(0) or I(1) disturbances.